Difference Between Identity Theft and Identity Fraud

Identity Theft vs Identity Fraud

Difference between identity theft and identity fraud is subtle; therefore, you have to pay attention to the meaning of each term to understand the difference. At the very outset , the terms Identity Theft and Identity Fraud represent a subject of confusion to many, primarily due to the fact that these terms are often, and mistakenly, used interchangeably. It is a genuine mistake, one that occurs as a result of combining the definitions of both crimes. On a general note, the terms may casually imply the theft of someone’s identity and personal information. However, it is important to recognise the subtle differences between the two, which illustrate the fact that they constitute two separate crimes.

What is Identity Theft?

Identity Theft is traditionally defined as the misappropriation of someone’s identity. Simply put, it means wrongfully gaining access to or stealing another person’s identity. The term ‘Identity’ includes an individual’s name, date of birth, address, financial information such as credit card details, Social Security number or other such details pertaining to an individual’s identity. Typically, such information is stolen, acquired , or collected for unlawful purposes. The crime of Identity Theft is not dependent on the status quo of the victim. Thus, the crime is committed whether or not the victim is alive or deceased. A victim of Identity Theft could be held responsible for the crimes of the thief.

Stealing someone’s personal information without that person’s permission opens up an array of gainful opportunities for the thief. With such information, he/she can open new accounts or commit crimes. It is important to note that victims of Identity Theft include not only the person whose identity was wrongfully assumed, but also, vendors, banks, lenders, and other businesses.

What is Identity Fraud?

If Identity Theft involves stealing someone’s personal information, think of Identity Fraud as using that information to deceive or defraud. In other words, the stolen information is used to commit fraud of various kinds. A person’s identity and personal information are wrongfully used to gain access to various resources, services or goods. Examples of such fraud include opening a bank account, obtaining credit cards, purchasing goods, applying for loans, committing crimes such as murder, theft or other serious crimes, applying for jobs and obtaining documents such as passports or licences. It is thus important to recognize that stealing a person’s identity or personal information does not by itself constitute the crime of Identity Fraud. Identity Fraud occurs only when the wrongdoer uses that information for illegal purposes or fraudulent activities.

Given this explanation, the natural assumption is to think of the two crimes as related, that Identity Fraud occurs only as a result of Identity theft. Although, this is typically the case in most situations, it is not the only instance of Identity Fraud. Identity Fraud can be committed without Identity Theft. Defined as an unlawful identity change, Identity Fraud can also be committed by assuming the identity of a person that does not exist. Thus, information is fabricated to set up a fake identity purely for illegal purposes. Popular examples include producing falsified ID’s to obtain alcohol or cigarettes or to gain access to bars and nightclubs.